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TMI Blog1993 (6) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... s argument it is necessary to refer to the admitted fact, namely, that the turnover sought to be assessed represents the value of the goods transported to other States on consignment basis. 3.. The learned counsel for the petitioners submits that no purchase tax can be levied on such turnover because the purchases do not acquire the quality of being the last purchases inside the State. These purchases will become last purchases only on the sale of the goods within the State to which they are transported. Since it is not the case of the department that the said goods have been sold in the State to which they were transported, the purchases effected by the petitioners in the State do not acquire the quality of being the last purchases inside the State. 4.. The learned counsel for the petitioner, going by the decision in Keveyam Co. [1986] 63 STC 387 (Ker) is well founded in this submission. But the effect of this decision stands erased by the Kerala General Sales Tax (Amendment) Act, 1988, Act 6 of 1988, for short "the Amendment Act". That this is the object that is sought to be achieved by the amendment is clear from the Statement of Objects and Reasons which reads: "Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 63 STC 387 (Ker) therefore is liable to be rejected. 5.. The learned counsel for the petitioners has no case that the Legislature is not competent to enact a law on the subject purchase tax. If that be the position the Legislature is equally competent to exercise power in respect of subsidiary or ancillary matter of preventing evasion of tax. Section 8 considered in this background prevents evasion of tax because it helps determination of the situs of the last purchases. The argument of the learned counsel for the petitioners that the Legislature is not competent to enact section 8 therefore is liable to be rejected. It should in this connection be remembered that K.A. Nayar, J., after elaborately considering this aspect has arrived at the same conclusion. 6.. Yet another argument of the learned counsel for the petitioners is that the Ordinance has no retrospective operation. The question whether the ordinance is retrospective or prospective does not arise because what is sought to be achieved by the amendment is not to enact section 8 for the first time but only to clarify the object with which section 8 was enacted. This clarification was necessitated on account of the Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase acquires the character of last purchase in the State in the hands of such dealer and in case such purchase acquires the character of last purchase in the State in the hands of such dealer, the turnover in respect of such purchase shall be liable to tax in the year in which the purchase acquires the character of last purchase; 8.. Stage of levy of taxes in respect of imported and exported goods.Where in the case of any goods tax is leviable at one point in a series of sales or purchases, such series shall,- (a) in the case of goods imported into the State either from outside the territory of India or from any other State in India, be deemed to commence at the stage of the sale or purchase effected immediately after the import of such goods; (b) in the case of goods exported out of the State to any place outside the territory of India or to any other State in India, be deemed to conclude at the stage of the sale or purchase effected immediately before the export of such goods." We may at once mention that the words "but subject to the provisions of section 8" were absent in the explanation as originally enacted, and were inserted by the Amendment Act 6 of 1988 with effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State, whether the purchases of the closing stock of goods as on March 31, held by agents outside the State, could be brought to tax as having attained the quality of last purchase before that date. The Sales Tax Appellate Tribunal upheld the contentions of the assessees that these purchases could not be treated as having attained the quality of last purchase, merely because they were situated outside the State, and therefore they were liable to tax only in that year in which the quality of last purchase was attained by sale, consumption or otherwise. This view of the Tribunal was upheld by a Bench of this Court in Deputy Commissioner of Sales Tax v. Keveyam Co. [1986] 63 STC 387. The Bench held: "There should not be any distinction between the closing stock of the goods held by an assessee inside the State and outside the State as the goods sent to his agents outside the State on consignment basis still continued to be the goods of the assessee and as the assessee had got the power of disposal, even over such goods sent outside the State, it was open to the assessee to recall the goods at any time and deal with it in any manner. Therefore, the goods which moved outside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled before this Court under article 226 of the Constitution, which having been dismissed by the learned single Judge, have resulted in the writ appeals. The main judgment of the learned single Judge is reported as Narayanan v. State of Kerala (printed at page 148 supra); [1990] 2 KLT 336. O.P. No. 668 of 1991 heard along with these appeals, is a writ petition filed by one of such assessees challenging the monthly assessments made on him for 1990-91. The petitioner in T.R.C. No. 151 of 1991 has similarly been assessed on the purchase value of the closing stock of his goods held outside. He challenged the assessment by way of departmental appeal and second appeal. The Appellate Tribunal negatived his contentions and upheld the levy on the basis of the decision in Narayanan's case (printed at page 148 supra); [1990] 2 KLT 336. The tax revision case challenges the order of the Tribunal. 7.. The question raised in all these cases is the same and, therefore, they have been taken up together. We may state even at the outset that though it was the constitutionality of the amendment by Act 6 of 1988 that had been primarily in challenge in the writ appeals, counsel for the assessees did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause the relevant clause, namely clause (b) refers to goods exported out of the State, and according to counsel, export implies export outside India and not transport of goods across the frontiers of Kerala to other States in India. 10.. We may reject this last contention without much ado. Whatever be the meaning of the word export otherwise, it is obvious from the section that it is intended to comprehend not merely export of goods outside the country, but also transport of goods from Kerala to other States in India. It is therefore unnecessary to exercise ourselves on the meaning of the expression "export" when the provision itself is clear on the point, that it takes in consignment of goods to other States in India. 11.. We shall deal with the main points seriatim. We have already given the legislative history behind the introduction of the explanation to section 2(xxvi) as also the amendment thereto. Having regard to the Statement of Objects and Reasons to Act 6 of 1988 which we have extracted earlier, it cannot be doubted that the express object of the amendment was to get over the effect of the decision of this Court in Keveyam Co. [1986] 63 STC 387 and to enable asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale or purchase immediately preceding the export was made. At the time this Court decided the case in Keveyam Co. [1986] 63 STC 387 section 8 was out of bounds in view of the wide sweep of the non obstante clause in the explanation. The question whether a purchase was the last purchase or not had to be considered without the aid of the fiction in section 8. But the position stands altered by Act 6 of 1988. The sweep of the non obstante clause has been whittled down by making the explanation subject to the provisions of section 8. In other words, after Act 6 of 1988 the question whether a particular purchase was the last purchase or not has to be decided in the light of the provisions contained in section 8. We cannot agree with counsel that section 8 lays down only the stage of last purchase and not the time at which the purchase acquires the quality of last purchase. The assessees' contention that despite the amendment by Act 6 of 1988, the position continues to be the same as it was before the amendment is not, in the circumstances, acceptable. The construction propounded by the assessees will frustrate the very express intendment of the Legislature in enacting Act 6 of 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely clarificatory in which case it affects transactions past and future. 16.. Radhakrishna Menon, J. has held that Act 6 of 1988 was intended to be clarificatory. No reasons have been stated. The learned Judge has proceeded as if the amendment was to section 8, and therefore stated that what is sought to be achieved by the amendment is not to enact section 8 but only to clarify the object with which section 8 was enacted. The amendment is to the explanation to section 2(xxvi) which made it expressly subject to section 8 of the Act. The position till then was that the explanation was not subject to any other provision in the Act including section 8. That position of the law was expressly changed by making the explanation subject to the provisions of section 8. A clear change in the law was intended. Thereafter, the last purchase of goods exported outside the State had to be decided with reference to section 8, without reference to the provisions contained in the last part of the explanation. We cannot treat such an enactment which brings about such a drastic change as clarificatory, because a clarificatory law is intended only to clarify as to what the law was earlier. In fact, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g stock of the goods held by the assessees outside the State from the assessments. 19.. In the view that we have taken, Writ Appeal No. 701 of 1990 which pertains to the assessment year 1987-88 as also O.P. No. 668 of 1991 in which the assessment challenged is of the year 1990-91 have both to be dismissed. The assessees therein are not entitled to any relief. 20.. So far as the other writ appeals and the tax revision case are concerned, Writ Appeal Nos. 696, 699 and 700 of 1990, 10 of 1991 and T.R.C. No. 151 of 1991 concern assessments for the year 1985-86, Writ Appeal No. 709 of 1990 for the year 1984-85 and Writ Appeal Nos. 697 and 698 of 1990 for the year 1986-87. Apart from the declaration of invalidity of Act 6 of 1988, the prayer made in all these writ appeals is to restrain collection of the tax demanded for these years under the impugned assessments. It is not possible to grant this relief as such. There is no prayer for quashing the assessments to any extent. But this Court is entitled to mould the relief as held by the Supreme Court in Dwarka Nath v. Income-tax Officer [1965] 57 ITR 349 (SC); AIR 1966 SC 81. The assessees are entitled to relief to the extent of modi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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